Forex means foreign exchange trading or currency trading. It is a global market, incredibly liquid, with an expanded daily trading volume. In many cases of investments, Forex trading is not for the faint of heart or the young trader.
Forex Trading has few advantages are:
1. It is a 24 hours Market (Always Open):
The Forex market is worldwide, so trading is constant as long as there’s a market open somewhere in the world. Trading begins while the market opens in Australia on Sunday evening and ends after markets close in New York on Friday.
2. There is High Liquidity:
Liquidity is the capacity of an asset which can be converted into cash immediately even without any price discount. InForex, it means we can move large amounts of money into and out of foreign currency with minimal price movement.
3. Transaction Costs not expensive:
The cost of a transaction will depend on the price of Forex, which is called as the spread. The spread is nothing but the difference between buying and selling price.
4 You Can Use Leverage:
Forex brokers allow the traders to trade the market using leverage, which has the capacity of trading more money on the market than what is in your account. If you were supposed to trade at 50:1 leverage, you can trade $50 on the market for every $1 which was in your account. It means that you can also control the trade of $50,000 using only $1,000 of capital.
5. There is a possibility of getting profited from Rising and Falling Prices:
The Forex market has no restrictions on directional trading. It means that if you think a currency pair will be increased in value, you can buy it or go long. Then, if you think it could decrease in value, you can sell it or go short.